Another year in the Baltic VC scene went by, this time with its challenges and lessons learned. As all 2023 wrap-ups are fading away from LinkedIn, I’d like to bring attention to industries that in spite of all the challenges seem to grow and show a lot of potential in the startup ecosystem:
👉 AI enters 2024 strong. It seems that by 2024 more investors have cleared out their strategy and in order to break down competitive barriers will be focusing on smaller AI model applications as large AI models require significantly greater resources and longer response time. As regulations like the EU's AI Act become more widespread, compliance in AI will be crucial.
👉 In 2023 we witnessed a seismic shift in cybersecurity as enterprises increasingly strengthened their defenses. Trends indicate the move towards even higher security requirements with the majority of organizations planning to increase their cybersecurity budget by >10% in 2024 (source: Info-Tech). The trend was reflected in the Baltics with some of the biggest funding rounds closed by cybersecurity startups (Nord Security, Binalyze, RangeForce).
👉 As geopolitical tension is on the rise, the increasing importance of security in the Baltic states is also evident. Nato Innovation Fund has closed with €1.0b ready to invest, while local dual-use focused VC funds are also being launched. Baltic startups developing dual-use technologies have access to funding opportunities to supercharge the development and contribute to shaping our region's security.
👉 Healthtech has been growing, and last year constituted 15% of all invested capital in Europe (source: Atomico). AI in health will be an important aspect in 2024 as it improves clinical decision-making processes and consistency. We are seeing a surge of startups in the Baltics with successful health applications from AI to robotics.
👉 In 2023 we have seen advances in nuclear fusion and nano technologies, which have huge implications for energy production in the future, while cleantech constituted 27% of all invested capital in Europe, up from 18% in 2022 (source: Atomico). Cleantech startups also dominated the Baltic funding scene in 2023, demonstrating that we are keeping up with trends.
2023 changed the way investors in the Baltics look at startups and their valuations. Median seed valuations increased with fewer rounds, signaling that investors were rewarding fewer startups, focusing mostly on the ones with solid metrics. In 2024 investors will outline the importance of current metrics, while fast emerging industries will offer success opportunities to investors and the ecosystem as a whole.
#AI #cybersecurity #dualuse #healthtech #cleantech #impact #impactinvesting #VC #startups Open Circle Capital
CEO & Co-Founder @ Leya AI (Hiring Performance Creative Strategist -> careers.leyaai.com) | Transforming education by bringing personal real-time speaking AI coach to everyone | Angel Investor | Practicing Biohacking
1yThanks for sharing insights Audrius Milukas, I am glad to see that VCs are resilient to crises. With Oxus.AI we are currently looking for Vc and Angel investors. Seeing this makes me more comfortable :)